Bitcoin prices have remained largely unchanged so far today, fluctuating around the $900 mark despite the adoption of trading fees by three of the ecosystem's largest exchanges.
As previously announced, BTCC, Huobi and OKCoin implemented 0.2% trading fees for both buy and sell trades today, a policy change that, coupled with their recent decision to end margin trading at the request of China's central bank, seems to be making for a different market.
Market data suggests that all three bitcoin exchanges have seen a drop in volume after instituting the new pricing policy. The fees, they say, were put in place in a bid to stop market manipulation and lessen the effects of price volatility. The exchanges announced the move over the weekend.
Initiated today, the trading fees do seem to be having an impact on trading volumes, if not prices.
According to data from Bitcoinity, for example, there were roughly 4,800 trades on OKCoin between the hours of 11pm and midnight EST. In the following hour, the exchange registered just over 1,000 trades, denominated in CNY – a fall of more than 80%.
Data pulled from Bitcoinity for BTCChina also demonstrates the apparent effect the new trading fees have had on volume.
After registering more than 37,000 trades between the hours of 7 and 8pm EST, that amount had fallen to less than 1,000 between the hours of midnight and 1am EST.
Bitcoinity data wasn’t available for Huobi past 22nd January. However, according to CryptoWatch, another exchange data provider, declines in Huobi’s volume can also be seen.
Daily trade volume has fluctuated between 120k and 150k bitcoins for the past few days, yet as of press time, Huobi has reported less than 38,000 BTC in trading volume since the start of the session.
Even so, the price of bitcoin seems to have taken the fee additions in stride.
According to the CoinDesk Bitcoin Price Index (BPI), the current average price is $905.35, down just 0.8% from the day’s open. CNY-denominated markets, by contrast, are up more than 6% today, trading at an average of ¥6,272, BPI data shows.
Given that the fee change had been anticipated, traders, even those based in China, struck a mostly optimistic tone on the news.
Kong Gao, marketing manager at OTC trading firm Richfund, for example, called the new volume figures “more organic”. He framed the development as good for the bitcoin market in the long term, even if the market has to adapt to new constraints.
Likewise, trader Zhao Dong said that the new numbers were a reflection of the decline in high-frequency traders, which would impact speculators, a group he called the digital currency’s largest market.
“The real volume (people who need to use bitcoin) is 10,000 to 20,000,” he said. “Short term speculation is 10 times that.”
Given this, he predicted that China’s exchanges would soon be compelled to make further changes.
Stan Higgins co-authored this report.
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